Discovery sees success with regional strategy ahead of busy 2020

David Zaslav, CEO, Discovery

Discovery has seen a positive quarter ahead of the launch of a range of streaming ventures in 2020. 

The company reported a total revenue increase of 3% for the quarter, with revenue reaching US$2.68 billion and net income of US$262 million. This is compared to a total revenue of US$2.59 billion and net income of US$117 million for Q3 2018.

International advertising and distribution revenues were up by 5% and 2% respectively – US$394 million and US$520 million.

These are solid results ahead of what is set to be a very busy 2020 for Discovery, with the launch of a number of streaming operations around the world. 

The highest-profile is a 10-year, £300 million deal with the BBC to see BBC natural history and specialist factual programming produced for a global SVOD service to be launched by Discovery in 2020. 

On the company’s earnings call, president and CEO David Zaslav said that it has largely “shied away from these seven or eight players that are fighting it out” for streaming supremacy but said that the BBC deal has given Discovery “a definitive collection of content” for its as-yet unnamed factual streamer.

He said that focusing in on the needs of different markets is the priority for Discovery, rather than creating a ubiquitous uniform product for a global market. 

He said: “Netflix is doing all their thing. Disney will do their thing. But we have local, local, local.”

Zaslav also spoke about Joyn, the German joint venture with ProSiebenSat.1 that launched in June. He said that it has “become a leading streaming platform since launching in June with more than four million monthly average users.”

He compared this positively with Sky Deutschland, noting that Sky has been in the country for 10 years but that “they don’t have 4 million subscribers.” He added: “In four months or five months we have five million users that are spending a significant amount of time with us with Joyn. And the reason is we’ve aggregated 55 channels and a massive amount of great local content.”

Another success story for Discovery is Poland, where the company has recently announced a deal with Polsat. The new offering will provide access to Polish films, series, documents, sports and entertainment programs in one place.

The company also recently announced the expansion of its Dplay streaming service into the UK and Ireland, following its launch in Italy earlier this year and expansion into a range of European markets. 

Zaslav said: “Dplay has now expanded to 10 countries internationally including; Japan, the Nordics, Italy, Spain and most recently in the UK and Ireland.

Dplay has some great momentum particularly after having been repositioned onto our own tech platform and it’s given us a lot of learning about how to position a large aggregated content service.”

The CEO promoted Discovery’s regional strategy, saying: “Polsat and we are coming together to create our own local Netflix product. It worked. It’s working very well in Germany. It’s working well in Northern Europe with Dplay for us. And we think by aggregating with others we could really be differentiated with local. 

Overall, he said that Discovery aims “to become the Hulu equivalent in select TV markets in Europe.”